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Fareed Zakaria GPS

News/Business. Foreign affairs and policies shaping the world.

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CNN

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01:00:00

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Us 9, America 8, United States 7, U.s. 7, Iraq 7, Al Qaeda 5, Peter Orszag 4, Bob 4, Iran 4, Reuel 4, Pakistan 4, Fareed Zakaria 3, Qaeda 3, Obama Administration 3, Mike 3, Eachre 2, Cadillac 2, George W. Bush 2, United 2, Obama 2,
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  CNN    Fareed Zakaria GPS    News/Business. Foreign affairs  
   and policies shaping the world.  

    September 12, 2010
    1:00 - 2:00pm EDT  

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for our international viewers, "world report" is next. for everyone else, "fareed zakaria gps" srts right w. this is "gps," the global public square. welcome to all oyou in the united states and around the world, i'm fareed zakaria. yesterday was of course the ninth anniversary of the september 11 attacks., for me, these anniversaries have always been times of remembrance and mourning. i lost a friend in the twin towers, but also of reflection. and i've tried to reflect on how far we've come as a country since that day and whether we are safer now than we were then.
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my answer is unequivocally yes. look, al qaeda flourished when governments the world over treated it as a minor annoyance rather than a major national security challenge. since 9/11, cockpit doors are now sealed so ples can't be used as bombs. other simple security measures that focus on travel have made open societies much less vulnerable. al qaeda terrorists and their ilk are being chased around the mountains of afghanistan. they are being bombed in pakistan. their money trails are being tracked the world over. it's very tough to plan major terrorist attacks in that environment. so smaller local groupinspired but not directed by al qaeda have found ways to attack easy, open targets like cafes, nightclubs, traistations. but the result is th kill locals rather than americans or brits or foreign soldiers. and of course is means that
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islamic radicali loses plic support in all these countries. think of saudi arabia as the perfect example. the poll numbers on this are stunning. islamic radicalism has been su losing public support in every muslim country over the last nine years. the result -- al qaeda is a mucr weakened enemy militarily, economically, politically. in the past nine years it has been able to put together scary videotapes, but it had not been able to mount a single terrorist attack. now is surely the me to evaluate soberly what has worked and what has been overkill in our reactiono al qaeda. it's clear to me that the io massive expansion of the national security state, the homeland security administration, the hundreds of billions of dollars spent, 17 million square feet of new office space for bureaucrats, the uivalent of three entagons, the code orange alerts, have all been an
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overreaction. now is the time to begin en rethinking the balance between security and liberty and rebalancing somewhat. now, here's the scary part. i' made every one of these points before. but when i say it today, it seems controversial, and that tells you something about the polarized, dysfunctional political atmosphere we are living through right now. i think it has something to do with the fact that the right wants to maintain an atmosphere of fear and, therefore, accuses me of being cavalier about security. and the left can't stand the thought that george w. bush might have done a few good things after 9/11. so the result is nine years t after the attacks we cannot have a sober, rational conversation on the topic. but we at "gps" will persist. you've heard my views. you will hear from four seasoned experts. two conservatives, two independents or liberals, two republicans, two non-republicans. >> we are terrorizing ourselves, fareed. we as americans, we have terrorized ourselves. we have provided the oxygen that
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sustains al qaeda. >> and then, what in the world is the rush to get out of iraq? my views.sh the main event of our show is an exciting "gps" exclusive. one of president obama's closesc economic advisers, peter orszag has left the white house. he talks about the economy, the stimulus plans, and what can be doneo get jobs flowing again. finally, we have found a way to decisively beat the taliban. we'll let you know. let's get started. so nine years after 9/11, the bottom line question is, are we safer or aren't we? let's gin the coertion by talking about that. richard falkenrath w responsible for developing and coordinating homeland security strategy at the white house after 9/11. and he then ran the new york
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police department's massive anti-terror efforts. bob baer and reu marc gerecht are former cia operative officers. and both have written extensively on all these issues since then. falis ghergis is a professor of politics at the london school of economics. welcome to all of you. richard falkenrath, how would ? you answert thaquestion? are we safer than we were nine years ago when al qaeda attacked the united states? >> we here in the united states are much safer. al qaeda still exists, but it's been massively damaged through nine years of an onslaught against them. our defensive abilities here in the country, our law enforcement is much better, there's no question we're safer. >> bob, you were in the field when al qaeda was growing. it was often a kind of an under-the-radar screen phenomenon. a t of countries didn't take it very seriously. what is your sense nine years
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after 9/11? >> well, i think we're a lot safer inside this country, and i think there's a lot of middle eastern countries that are safer today. let's talk saudi arabia, a country that i haven't been very favorable to in the past.'s but it's amazing how this country has turned around itself on terrorism. and even yesterday, they're closing down jihady sites, and it's largely thanks to the new king. but the point is that i think al qaeda -- and that was where al a qaeda was born is saudi arabia -- is on the run. >> reuel, i tend to agree with bob. what i'm struck by, and i want s to see what your response is because m not insure how you're going to respond. what i'm struck by is the number of imams who are issuing fatwas of against al qaeda, against suicide bombings. a guy who's writings i know you have studied how come out andfe
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effectively openly repud yated him. if you look at polling in muslim countries, the support for islamic radicalism, which is not even al qaeda, you know, sort of one step in, if you will, from al qaeda, support for islamic radicalism of any kind has plummeted. doesn't this all suggest that the political force of al qaeda, separate from the issue of military strength and its ability to organize tactic that that political force has weakened substantially? >> yeah. i mean, i think they have taken quite a hit since 9/11 primarily because the majority of those people who have been killed through terrorism since 9/11 have certainly been in the middle east and they have been muslims. and i think the wars in iraq and afghanistan but particularly iraq where al qaeda and other sunni insurgents, you know, had
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a real heyday slaughtering shiite women and children had a ofound effect -- it took a while, but i profound effect on sunni arab attitudes in the middleast and, needless to say, the attacks in the sunni arab world.st and i think also in pakistan, inevitably bounced back against al qaeda and their ability to present themselves as sort of modern day paladins of a just islamic cause. >> you've been arguing for a while that this is actually a sea change that has been relatively unnoticed in the muslim worldright? >> yes. absolutely. in ft, al qaeda has not just suffered, fareed, a catastrophic military defeat. i would argue a more critical development is the fact that al qaeda has lost the struggle for muslim hearts and minds. yet fareed, here we are today.
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it seems to me there's a consensus that al qaeda no longer exists as a centralized organization.ul yet i would argue on the psychological level, and this is really the point i want to make today, that al qaeda has taken hold of the american imagination. there has been, unfortunately, at least to my mind, a sea change, a reshaping of the american imagination since 9/11r the terrisofl qaeda which no longer exists as we -- as it used to be since the 1990s now has replaced the scare. we have to really deconstruct the terrorism in the united states and why al qaeda has taken hold of the erican imagination. >> reuel, how do you react to that? you write for "the weekly standard." you're somebody who would be comfortable, i hope i'm not mischaracterizing you as a new york conservative. it seems somewhat difficult to say to conservives, look, this enemy's not as strong as it wase partly because of our success,
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partly because of its own mistakes. the reality is these guys are not 25-feet tall. >> i don't know. i can't really speak about the american imagination. i live in bethesda, maryland, after all. but i mean, i would say that the problem is that al qaeda and other islamic militant groups, the threat is insidious. so it's always possible that you will have another strike. and i think at least with government officials who are, of course, responsible for our lives, it is disturbing. i mean, i would agree with you that the reaction bureaucratically in the united states was excessive. it was understandable. it was unwise, but americans throw lots of money when they ha have problems, and we did that. >> bob, where do you stand on this issue?
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>> oh, i agree.at the threat of al qaeda is virtually nonexistent. i say that with the possibility this one person could blow himself up in a mall and kill a lot of people. and i dread the reaction in this country. but it has taken over the american imagination. it's transformed it into, you know, a clash of civilizations. us against the islamic world. this is the popular view, and it's verging on racism.e and it worries me because the threat is not that important. >> rick, how do you react to this conversation because on the one hand there are these macro trends that does seem, i would surprised to find,t we have some degree of consensus in this group. but then you have to worry if you were in your old job at the white house for president bush or at the nypd. you have to worry about that lone guy. you wod have to worry about the fact tt even if 99% of muslims around the world had
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repudiated al qaeda, that still leaves you with a bunch of people who could do bad things. how do you think oit? >> i think you've got it exactly right. very small numbers of people can inflict catastrophic harm, and the american people expect their government to protect them against those remote possibilities. it'sand very difficult threat to counter. >> but how do you react to the point that -- i wrote that reuel, i was delighted to see that he agreed with which is that the's been a massive bureaucratic o verreaction. rstandable.is deun my old mentor samuel huntington once said america's great strength in military affairs was bigness, not brains. that from world war ii on was whenever we saw a problem you'd throw a lot of money at it and that was the way you salve it. but do we really need all of this? i mean, we spent, one scholar calculated we spend $5.5 billion to counter the anthrax scare. you know, you add it all up, you're talking about hundreds of
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billions of dollars. my favorite statistic is we have constructed 17 million square feet of office space. that is three pentags. to house the bureaucrats who are devoted to thomeland security intelligence establishment. obviously want you to have a very good office, rick, but was all of t rest of it necessary?ip >> there are certainly parts of it that aren't necessary and that's truecross the whole government. you can look at all of it, any sector, any department and find waste and inefficiency and it's there. i fault the government for really failing to downsize from the cold war establishment as it ramped up to deal with terrorism and other asymmetrical threats. i think we didn't do a very good job of that. i was in the white house on 9/11, d i remember how we felt on that day as do everyone who was in the country at that time. and i'm really not surprised that we reacted in this way. this is what our country does when it suffers a blow as we did on that day nine years ago.
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and it's how we respond. we respond with bigness and lots of different programs. some of which yield benefits, others are viewed as wasting. >> we're going to take a break. when we come back, has the way we've handled 9/11, rtis our counterterrorism strategy counter productive?e what is the cost of the war on terror? i am very worried about koran burning and the e controversy over the mosque near ground zero for the signal it sends to the world and indeed inside our bordtoers that we ha intolerance in our country and this enophobia which is an ugly message to send to the world. what's around the corner is one of life's great questions. and while it can never be fully answered, it helps to have a financial partner like northern trust. by gaining a keen understanding of your financial needs, we're able to tailor a plan using a full suite...
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prolifically on the subject of terrorism and islamic radicalism for publicatioek like "the weekly standard." and we have a professor from the london school of economics, a long-time expert on islam and muslim societies. let's talk for a moment about the danger, the damage of all this overkill. you're living outside the country now. what is your sense of how the united states' war on terror, homeland security measures, how have they affected america, its image, its security?th >> fareed, at the height of its power, al qaeda numbered between 3,000 and 4,000 fighters in the late 1990s. according to all our intelligence services and also independent experts now you have between 300 and 400 surviving members of al qaeda, between 300 and 400 surviving members. most of them located in the pakistan tribal areas.
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most of them are rookies because most of the field lieutenants, most of the brains, the skill, the mid level managers have been either killed or captured. no decision-makers. the top leadership of al qaeda basically is hibernating underground. they have lost the strategic . struggle. yet, when i come back to the state of mind, how do you deconstruct a state of mind that basically we as americans believe we are constantly under imminent threat? you have an army of experts who basically hide implausible threats, potential threats. and this affects how americans respond to international relations. fareed, even president barack obama, genuine as he is, progressive as he is, intelligent as he is cannot sayn we are not at war with 400 or 500 surviving, unskilled members of al qaeda. that's why the narrative of terrorism has undermined america's moral standing in the world., we are terrorizing ourselves,
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fareed. we as americans. we have terrorizedur oselves, we ha provided the oxygen that sustains al qaeda. remember, the strategic vision of al qaeda since 1996 has been not to defeat the united states. al qaeda, those few idiots cannot defeat the united states of america. the strategy has been to embroil the united states in a greater a clash, a big front with the muslim world, to create a clash of civilization. >> reuel, we playing into al qaeda's hands, the way we've reacted? >> oh, i don't think so. i mean, again, i would rather not see bloated american national security and bureaucracies. this has been a recurring problem with organizations, it wasn't just al qaeda that makes these things grow. t bureaucracies turn toward money ke flowers turn toward sunlight. i think we've handled this,
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again, bureaucracy aside, i think we've handled this reasonably well, and i think we can exhaust ourselves. i was a little exhausted rl listening earlier, a little bit too quickly talking about how all this may have damaged us abroad. i don't really think it has. we reacted in this way because islamic militancy has a broad footprint throhout the middle east. it is perhaps the dominant intellectual movement in many countries in the region. and because of that, because of the sympathy that we saw for bin laden after 9/11, it does, you know, make you nervous. again, i think we are adjusting, i think middle eastern countries are adjusting, but i would suggest to you that islamic radicalism, not necessarily al qaeda, still remains a problem. all you have to do is ask the dictators in the region whether they think so, and i think they'll answer yes. >> bob, do you think there was
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something counterproductive in the way -- has our reaction produced a kind of -- has it embroiled us in, you kno places around the world? bin laden said once in one of his interviews, he said all we have to do is to send a few, a couple of jihadis to plas, ray the banner of al qaeda, and the american generals come running with their armies. >> well, he's right. i mean, 9/11 provided the opportunity to invade iraq, which had noing to do with al qaeda. and today we are engaging in d what i call blood feuds in pakistan and waziristan with a tribe in waziristan. and noin yemen apparently we're getting into a blood feud there. so this inability to define terrorism and islamic militancy is getting us into oor ne me after another. we are not out of iraq, and it's unlikely we will be completely out next year. we're putting a lot of pressure on islamabad by fighting in the
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tribal areas. and now we've got yemen. so i mean, this is turning into an endless war. and it's got little to do with al qaeda, and i think a lot of this has to do with overreaction to 9/11.wo >> rick, do you worry that you know it's the ground zero islamic center, whether it's the koran burning, that an atmosphere where there is, you know, a greater sense of being under that to al qaeda actually worsens our security o because you lose the support of the local muslim communities? is that a fair tension to worry about?, >> well, yes, it is. but i think in new york and in the united states more broadly, the muslim community is highly supportive of our efforts to keep the country safeot and is really not a hot bed of radicalism as you say. nonetheless, it's only very small numbers that are required to stage an attack. the year 2009 was by far the most active year in terms of home grown terrorist plots.
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none of whh resulted in a significant attack, but there were about a dozen appreciable threats to this country that emanated from within our bordert in one way or another in the year 2009. now i think that's a manageable problem. we have law enforcement, we have intelligence that can deal with it. we need to stay on it, and we n defend the country. but we did see that in 2009. i'm very worried about koran burning and the controversy over the mosques near ground zero for the gnal it sends to the world and, indeed, inside our borders that we have iolerancen our is x country and this xenophobia which is an ugly wd to send to the world.k >> on that, fascinating conversation, a nice way to have a reasoned, sober conversation nine years after 9/11. thank you.ac we'll be right back. consistent with our agreement with the iraqi government, all u.s. troops will leave by the end of next year.
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now for our "what in the world" segment. now this the u.s. has ended combat operations in iraq, tsehe is a strong sentiment in this country to get all of the troops out of there.a president obama in his speech last week reaffirmed his commitment to withdraw troops by the end of 2011. but i say what is the ru? thws course, the tragic incident that took theives of two u.s. soldiers and wounded nine others. this is, however, very much the exception, not the rule. so far in 2010, around 50 american troops have been killed in iraq. that's 50 too many, of course, but it is actually a l casualty rate for military operations even peacetime. so we have to ask ourselves, what price is worth finishing what we started in iraq. this is a nation that is still in political chaos, economic
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shambles, and rife with insecurity. although u.s. deaths are down am dramatically from the height of the r, the country remains unstable and tense. in many areas of the country, public services like electricity are not much better off than they were under saddam hussein.y the iraqi army chief says his troops won't be ready to guard his nation until 2020.re and this land that we were going to make the shining democratic example for the entire middle east is a bit of a democratic nightmare right now. it has been half a year since the iraqi elections, and there is still no government. were all american troops to withdraw, we can be sure of two things -- these bad trends would get worse, and the united states would lose power and influence in the region, most probably to iran. now, many americans never liked the iraq war in the first place and many seem to feel that the way to vindicate this feeling to get out fast. if iraq crumbles, well, it
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proves them right. but can we forget out how this operation began? at this point the united states has the infrastructure in iraq to support tens of thousands of troops at relatively low cost. if the iraqint there is a huge benefit. it helps csolidate a modern democracy in the heart of the arab world. one that could be pluralistic, open, and comfortable to the westn america, that works well for a model and it works well for national security reasons. thiss a crucial part of the world, oil rich. and the u.s. can stay actively engaejed there and keep a close eye on iran. it could be a kind of listening post for the entire region. in the 1950s, president dwight eisenhower kept tens of thousands of troops in south korea after hostilities ceased. of course, he had to keep th there because of the threat from the north. but it also helped consolidate democracy there. it took 30 years, but democracy
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did stabilize. and that stabilization helped stabilize east asia and strengthen america's influce in the region. the historicalnalogy is far from perfect. the korean war began very differently, the north invaded the south. but in the end, iraq could have a similar outcome. america could help a pivotal untry in an important region become a stable democracy and an ally. we will be right back. we have gone through an unbelievable experience in this country. it's not surprising that io emotions run high. there's lots of frustration on both sides.
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there's no more crucial issu e right now than the economy.lk the president spent the bulk of the week talking about it. i think it's fair to say tha most americans have spent the bulk of the year worrying about it.szag peter orszag was until six weeks ago one of the troika of the president's closest economic advisers. he stepped down at the end of july as e director of the office of management and budgetr
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we welcome peter orszag for his first interview since leaving office. a "gps" exclusive. >> good to be here. >> let me ask you something. you have served in barack obama's administration. you're really the first truly high-ranking person to leave. there is mood in the country that thinks that he is a quasi-socialist who's trying to transform america, a line of his that he said it's going to spread the wealth around us, quoted endlely. what do you think, you know, working with him, what's his core economic philosophy? >> i don't know. i mean, i think some of the descriptions that are out there are just completely off. the disjuncturbetween what's said and reality is probably wider than it's ever been, unfortunately. >> so who is -- >> president obama is not a socialist. >> who is he? but tell us more. fill in the details. >> >> look, there was pressure, for example, to nationalize banks.
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there still is an ongoing debate about whether that would or would t have been a good idea.t but the president did not do that. one would think this a socialist would be all in favor of jumping at the opportunity to nationalize banks. he has maintained the basic structure of our capitalist system, despite the fact that we've gone thrgh a very dramatic period. so i think that reflects -- i mean the word i would use is attempt at -- is yearning for pragmatic solutions to the problem that say we face and socialist just does not fit. >> people say he's never spent time in private business. i realize that he was briefly at a private law firm. some people would doubt whether that counts. but that he doesn't have a feel for business. and that very few people in hisf ministration have that feel. >> well, i don't know that his previous experience really
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eaks to where his, you know, wh his policy outlook is. >> alan greenspan was asked on "meet the press" a couple of weeks ago, maybe a month ago, what he thought this divide betwn business and government and the attude of business toward the obama administration. and he said, i've been around this topic for 49 years, and i've nevereen us so bad. why do you think the business community is so upset with the obama administration? >> well, i think, lo, i think there are a couple explanations. i think the most important explanation is we have gone through an unbelievable experience in this country where private sector borrowing collapsed, the enomy was in a tailspin, and in that setting it's not surprising that emotions run high, and there's lots of frustration on both sides because the administration aims you don't understand, we're protecting you from what would happen. and the administration i think believes it's stepping in and
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taking a sensible path to try to work our way forward and not being appreciated for what it is doing. on the other hand, corporate america has this sense that the administration doesn't get what they do, does not have a ro representative from their worldr and sometimes use rhetoric -- >> is it fair to say that the obama administration should have somebody? i mean -- >> look, i'm not going to -- i don't think i should get in the game of -- >> but the wrap against you guys is that all of you is smart but none of you have run anything.un >> look, i run a small business. but i think the basic complaint, again, is this sense and it definitely is out there that corporate amera ullike someone that they feel comes, you know, gets what they're saying. and comes from their world. but i think the more fundamental question is we are in this situation whe there does seem to be an elevated level of tension and beyond a sp thke that, what else can beone to try to take these levels down to
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more productive, you know, channel it into a more productive way. >> you were really tasked with worries about the budget. one of the things that people worry about clearly, if you look at the polls, is the spiraling budget deficit, the debt. so here is a golden opportunity which is if you let the bush tax cuts expire, you save an enormous amount of money for the government. the budget deficit comes down dramatically, almo 1% of gdp, i think.hi do you think that the bush tax cuts should be -- should we just let them all expire? you wrote an op-ed aut keeping years but cple of then letting them all expire. >> yeah. and i think that cumn had been somewhat misinterpreted. the key point is we unfortunately can't afford the tax cuts over the medium and long term. we face too large a deficit out in 2015, 2020.he
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by the way, not continuing them will return the tax code to the9 way it was in the 1990s. we've already lived through a period in which that tax code was in force, and it didn't create economic catastrophe. we can do that. if the price of not making tax cuts permanent is extending all of them, even upper income ones for a year o two, that would be a price worth paying.th >> is it true that in order to get the budget deficit to close in the medium term, inevitably oouf you'll have to have higher taxes, not just a repeal of the bush tax cuts but more than that. >> if we actually ended the bush-era tax cuts, tt would pretty much to it for the medium term. most of the budget projections for, say, 2015 are suggesting deficits of 4% to 5% of gdp. there's uncertainty about those numbers, but that's the central estimate. something like 3% or lower gets you into a sustainable range.
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and if you do a bit on the spending side and end the tax cuts, you pretty much get there. >> have you seen a serious republican plan that is an alternative to the president's plan? >> on what topic? >> on -- >> on fiscal? >> fiscal side? >> no. i have not seen a serious plan that will -- i guess the test i would put forward is that that would be credible in terms of it being imemented as it's laid out, and that would be scored by -- like the congressional budget office is substantially reducing the deficit over time. >> ds it worry you that in our case unlike, say, a country like japan which also has run big t deficits, the debt is not owed mostly to us, the american people, but a lot of it owed to china, a lot of it is owed to foreign central banks? >> look, i think we're in -- the way i would put it is we're in anxceptional period. ten-yeond yields are extraordinarily low.he treasury debt is the safest asset in the world.
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we have breathing room to address the problems that we face. we will not always have that breathing room.we ultimately, the path that we are on will cause financial marketsp to impose constraints and pressure to address our budget deficit. not an immediate problem, but we never want to put ourselves in that situaon. so i wry less about the mix of foren versus domestic ownership and more about whether we can address that problem before it becomes a crisis because we don't want to find ourselves in that crisis mode. >> and we will be back with peter orszag. what do you say to the average american who's listening to th, and saying, yeah, but all i notice is you said you were going to restore the economy and, in fact, the joblessness rate is terrible? one word turns innovative design into revolutiory performance.
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hello. i'm fredricka whitfield in atlanta. here's a look at our top stories. an american hiker detained in iran could be released as early as today accordtology her attorney. iran's state media said sarah
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shourd will be s free as soon as a half million dollar bail is paid. the u.s. government says it's not involved in moves to free her. she is one of three american hikers detained in iran for more than a year now. they are accused of spying. in just a few minutes, tea party activists kiheare cking o a rally at the u.s. capitol. they're calling for a more limited government and reduced federal spending. the teaar ptyovement members began the day with a service at the washington monument and a march to the capitol. and the number of people missing has grown to six now in a huge gas line fire that decimated part of a northern california town. officials say four people were killed and 37 homes destroyed. more news at the top of the hour. straight ahead, more "fareed zakaria gps." ♪
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and we are back with peter orszag. so there are many accounts now of the meeting that takes place initially in the administration where the council of economic advisors paints a piure of how council of economic advisers paints a picture of how bad h t economy is and how badly it's doing and says that we probably need a fiscal stimulus of something in the range of $1.3 trillion to g us out of this mess. there are varying accounts of what happens next and whyen the administration ended up with a stimulus package of about sen to eight hundred billion. there are many people who say now that that was a cardinal mi bake you made becse what happened as a result was the stimulus was too small. it seemed ineffective, and people on the right can claim it never worked. people on the left can say, we told you all along it was too
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small. what actually happened? >> look, i think if it was up to the administration atitself, th situation would have been different. but we operate in a system of law here or system of politics that requires congressional enactment of legislation like the recovery act. and that imposed a real constraint. i can actually say i was in the room when the final details of the legislative package were being negotiated with senator reid, et cetera. i find it i mplausible that ave larger number could have passed the senate. i'm surprised we got as much as we did. if i were back at a think ta or brookings, it would be easy to say the right size was much larger, but give n the legislative constraints we face, i think it was crazy it was as
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big as it was. congress takes forever to enact time things, and by the they're enacted, it's too late. this was put together very quick sk and has lped a lot. if you look at the analysis of the budget office and others, we would be much worse off, and the whole theory of the recovery act was to provide one jump start. it did start the engine, but the question is, is the engine cranking sufficiently to be driving that karcar at a spufpe sufficient speed for the recovery we all want. >> the consumer is maxed out. the consumer is surviving on credit, they have 30 credit cards, 20% which have large balances on them, and businesses are looking at a muchro morro bt demand situation abroad, so if they are going to invest, they are going to invest in
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india, china, brazil. so you have these two forces, a maxed-out consumer and growthls tentials that a far more compelling abroad than at home which explains why the consumer isn't spending, businesses aren't spending and the average american worker isn't getting hired. >> two things, one, the pointwe diussehrearlier, which was we went through a really traumatic period so it isn't surprising there is an adjustment going on here. you're right, the savings rates among ahouseholds is up, and hile that may have some deleterious effect on short-term recovery, ultately that is a good thing because w can't continue to have a situation in which basically households were not saving at all. and on the business front, there is an interesting juncture. firms are no really spending on assets like buildings and things that might last for 30 or 40 years, but they e buying lots of equipment and lots of wa
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software, and you're seeing substantial investments in those kinds of areas. so i think the question is, why are firms holding off on, a, hiring, and b, making those longer le investments which we will need to see in order for this to become a more robust recovery. >> why are we not?s, >> i think it's, one a history of recoveries that were caused by a downturn of financialst sector collapses suggest it takes a while.ve so we have sluggish growth. firms not hiring because demand is growing at 1r 2%, and they're holding off on substantially new hires until they see better growth prospects. and i think if you talked with ceos as i know you do and i do regularly, there is a sense of -- they talk about uncertainty both in policy and regulatory uncertainty.
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that makes them nervous. >> what do you say to the average american who is listening to this and saying, all i know is, you said you were going to restore the economy, and, in fact, the jobless rate is terrible. >> there's no doubt about it. nobody can be pleased with the unemployment rate at 9.5% and long-term unemplment at the rates we're seeing, andpe so may people not just unemployed but also those who h given up and aren'tven in the labor force anymore. i think the real question, thgh, becos what specifically can we do to make the situation better, because we all acknowledge it's not where it should be. and far too many families arein suffering. >> peter d,orzed, thanks so muc. >> thanks for having me. >> and we will be right back.
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our question of the week. it's obvious. is ameca any safer today than it was nine years ago?
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let me know what you think. don't forget to subscribe to our broadcast on itunes. that way you will never miss a show and the price is free. now, as every week, a book. i want to recommend one called world."s rule your it's by kaiser fung. we throw around a lot of statistics on this show, and until you stop to think about it, you don't recognize how much statistics rule our world. thinking about buying a lottery ticket? bad idea. what line should you join on the supermarket? you can actually gain this. why is mdian income more important than average income? for those of you watho hatc statistics in college, this is actually an easy read with a big benefit. now for a last look. incredible, crisp video, isn't it? ll, it isn't real video at all, it's a computerenerated game a t